Page 209 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes Important Terminologies used in Inventory management

1. SKU (Stock Keeping Unit): Every product available at the store has a unique code. This
code which helps in the identification and tracking of the products at the retail store is
called as stock keeping unit or SKU.
The retailer feeds each and every SKU in the master computer and can easily track the
product in the stock just by entering the SKU Number.
Assigning a unique code to the products avoids unnecessary searching.

Example: Let us take the example of "Numero Uno" which stocks denims, shirts, T Shirts
and targets both men as well as women.
SKU for Shirts

NU - M-40-FL-W
NU - M-38-FL-B
Where:
NU stands for Numero Uno

M - Men
40 - Collar Size
FL - Full Sleeves
W - White (Colour of the shirt)

In the same way B in the second example would stand for Blue.
Simply typing NU - M-40-FL-W would let the retailer know whether the particular
merchandise is available with him or not.

2. New Old Stock (Abbreviated as NOS): The stock which is never been sold by the retailer
and now not even being manufactured comprises the new old stock. Such products do not
have takers and may not be produced anymore.
3. Stock out: Stock out refers to a situation when the retailer fails to fulfil the customer's
requirement due to lack of merchandise. The merchandise is not available in the current
inventory and thus the customer has to return home empty handed.

Preventing Loss of Inventory

Employees working at the store might get tempted to steal the merchandise. Let us go through
some tips which help to prevent loss of inventory:

Check the bags of the employees before they leave the store.
Raise an alarm whenever you find someone stealing something. Supporting a wrong
deed is also a crime.

Make sure that all the employees leave from one common door.
Avoid multiple exits.
Check garbage before dumping.

Keep proper record of the inventory (Stock coming in and going out)

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